Kwong Lung 2017 Results (8916.TW) April 2018

Transcription

1 Kwong Lung 2017 Results (8916.TW) April 2018

2 Disclaimer This document is provided by Kwong Lung Enterprise Co., Ltd. (the "Company"). Except for the numbers and information included in the Company's financial statements, the information contained in this document has not been audited or reviewed by any accountant or independent expert. The Company makes no express or implied representations or warranties as to the fairness, accuracy, completeness, or correctness of such information or opinions. This document is provided as of the date herein and will not be updated to reflect any changes hereafter. The Company, its affiliates and their representatives do not accept any responsibility or liability for any damage caused by their negligence or any other reasons, nor do they accept responsibility or liability for any loss or damages arising from the use of this document or the information contained herein or anything related to this document. This document may contain forward-looking statements, including but not limited to all statements that address activities, events or developments that the Company expects or anticipates to take place in the future based on the projections of the Company toward the future, and various factors and uncertainness beyond the Company's control. Therefore, the actual results may differ materially from those contained in the forward-looking statements. This document is not and cannot be construed as an offer to purchase or sell securities or other financial products or solicitation of an offer. This document may not be directly or indirectly reproduced, redistributed or forwarded to any other person and may not be published in whole or in part for any purpose. 2

3 Kwong Lung development and key milestones Build the regional foundation Key milestones 1966 Established 1982 Built its first down factory in Taiwan 1988 Built its factory in Vietnam 1993 Built its factory in China Expand and accelerate business growth Key milestones 1999 Public listed at Taipei Exchange 2000 Diversified its business and set up garment division 2012 Revenue doubled since 1999 (CAGR 5%) Transform and aspire sustainability Capital: US$ 37.6mn (NT$ 1bn) Chairman: Hebert Chan Employees: 6,488 (Taiwan 5%, Overseas 95%) Key milestones 2014 Initiated CSR report 2015 Revenue of garment division has begun to exceed down division 2016 Ranked as top 20% in Corporate Governance Evaluation Now 3

4 Primary businesses and product offerings Key products: Goose down Duck down Down Garment Key products: Gore-tex jackets Snowboard jackets Taping jackets Sleeping bags Key products: Duvets Duvet covers Quilts Home Textile 4

5 Selective client list Garment Home Textile Down 5

6 Competitive advantages Advanced R&D ability Develop functional down with waterproof, insulated functions to create added value Promote self-developed artificial down and resin cotton to provide additional solutions for clients and enhance profits Superior patterning and sampling Retain experienced pattern makers with more than 15 years of experience Coordinate closely among clients designers, pattern makers, sample makers and production team to identify issues before mass production Agile production management Produce diverse products including jackets and sleeping bags to satisfy clients onestop shopping needs Provide production flexibility for clients to support their sales and marketing goals Commitment to quality Commit to quality and build long term relationship with leading American, European and Asian brands Implement prudent processes to ensure product quality throughout production 6

7 Regional footprints Poland Down rep office Coordinate local suppliers and partners Japan & Korea Japan: Sales channel of down, garment and home textile products Korea: Sales channel of down Shanghai, China Down production Garment patterning center Home textile production Vietnam Down production Garment production Home textile production Taiwan Headquarter Financial and R&D center Down production 7

8 Business strategy and growth drivers Key growth drivers Existing clients and markets Third priority Provide one-stop shopping for clients by leveraging KLE s advantages Improve productivity of low seasons Top priority Leverage close relationship with long term clients and expand businesses with key clients growth New clients and markets Second priority Review and update a comprehensive list of potential clients Target to acquire new garment clients annually New products and services Existing products and services 8

9 Optimizing manufacturing costs Key initiatives Material cost Develop qualified local suppliers in Vietnam and expand the share of local procurement Regularly review suppliers and implement scorecard Drive commonality to optimize cost and leverage volume Manufacturing costs Direct labor cost Improve productivity and enhance quality by implementing Total Production Innovation (TPI) Accelerate learning curves by well-designed training and analyze production sections in depth Manufacturing overhead Acquire manufacturing management professionals from other industries and introduce advanced factory management Promote qualified local talents as managers and deepen communication with local stakeholders 9

10 Revenues and earnings 7,504 8,070 9,093 9,008 8,920 8,599 8,513 Revenues (NT$ mn) 4,425 3,991 4,405 5, Earnings (NT$ mn) (110) 10

11 Revenue breakdown Revenue Breakdown ( ) 2% 2% 2% 2% 2% 6% 30% 26% 24% 28% 28% 24% Others 41% 46% 44% 33% 29% 26% Home Textile Down 28% 26% 30% 37% 41% 44% Garment

12 Business profitability Gross Profits, Gross Profit Margin and EPS ( ) 12.9% 13.5% 15.2% 15.7% 16.1% 14.5% 18% 16% 14% 12% 10% 1,040 1,231 1,367 1,404 1,385 1,237 8% 6% 4% 2% EPS (NT$) Gross profits (NT$ mn) Gross profit margin (%) 0% 12

13 Financial structure Debt ratio ( , %) Long-term Fund to Property, Plant and Equipment ( , %) Note: Debt Ratio = Total Liabilities / Total Assets; Long-term Fund to Property, Plant and Equipment Ratio = (Shareholders Equity + Noncurrent Liabilities) / Net Property, Plant and Equipment 13

14 Dividend policy Cash Dividends, Payout Ratio and Dividend yields ( ) Payout ratio (%) NA Dividend yields (%) Note: The calculation of 2017 dividend yield was based on the share price $48.3 of March 28 th,

15 Sustainability initiatives Publish CSR reports since 2014 Conduct mutual communication with stakeholders and provide comprehensive contents Understand and detail stakeholders priority topics in the CSR reports Include operating overview, green production, greenhouse gases, social engagement and employee care Improve information transparency and reliability Adopt GRI G4 on the CSR reports framework British Standards Institution (BSI) reviewed and assured the CSR reports reliability 15

16 Peak and low seasons by quarter Revenue (NT$ mn) 2,782 2,433 1,588 2,288 2,263 1,816 1,664 2,194 1,644 1,815 1,529 1,544 3,300 2,945 2,706 2,540 2,691 2,493 2,297 2,071 1,999 1,918 1,966 1,719 Earnings (NT$ mn) Q1 Q2 Q3 Q (20) Q1 (14) Q2 Q3 Q4 (19) (24) (44) (715)

17 Financial highlights NT$ mn Net Sales 4,425 3,991 4,405 5,669 7,504 8,070 9,093 9,008 8,920 8,599 8,513 Sales growth (%) 2.3% -9.8% 10.4% 28.7% 32.4% 7.5% 12.7% -0.9% -1.0% -3.6% -1.0% COGS 3,932 3,417 3,667 4,817 6,630 7,030 7,862 7,641 7,516 7,214 7,276 Gross Profits ,040 1,231 1,367 1,404 1,385 1,237 Operating Profits Net Profits (110) Net profit growth (%) 15.8% -13.4% 69.1% 48.4% -21.4% 41.7% 80.0% 5.2% 12.6% 3.7% % Basic EPS (NT$) (1.09) Gross Margin 11.1% 14.4% 16.8% 15.0% 11.7% 12.9% 13.5% 15.2% 15.7% 16.1% 14.5% Operating Margin 2.4% 3.1% 4.6% 3.9% 2.6% 3.8% 4.8% 5.4% 5.4% 5.8% 4.2% Net Margin 1.9% 1.8% 2.8% 3.2% 1.9% 2.5% 4.0% 4.2% 4.8% 5.2% -1.3% ROE 5.3% 4.4% 7.1% 10.2% 7.7% 10.7% 17.8% 14.4% 13.4% 13.1% -3.5% ROA 3.0% 2.3% 3.8% 4.7% 3.3% 4.4% 8.1% 7.7% 7.7% 7.7% -1.2% 17